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Tuesday, January 22, 2008

Ben Bernanke's FOMC Cuts Rates 0.75% to 3.50%

Bob Brinker, Jim Cramer and many other "noisy pundits" will say Ben Bernanke's Federal Reserve Open Market Committee (FOMC) finally "listened" to their advice. Saner minds will conclude the economic data the FOMC watches has quickly deteoriated and they needed to take quick action to avoid a recession. Whatever the reason, the Federal Reserve cut the Fed Funds Rate a week before their next scheduled meeting this morning.

NEWS ALERT from The Wall Street Journal: Jan. 22, 2008The Federal Reserve, confronted with increased fears of a recession, cut the federal-funds rate by three-quarters of a percentage point on Tuesday. Policy makers cited a weakening economic outlook, and downside risks to growth. The move came amid a global stock-market selloff. On the news, U.S. stock futures quickly reclaimed some early losses but remained volatile.

Everyone is so negative. I wonder if the rate cut will help or do we continue to sell-off.

MARKET ALERT from The Wall Street Journal.Jan. 22, 2007

The global market selloff accelerated as shares came under pressure for the second straight session. In Asia, Hong Kong plunged 8.7%, Australia lost more than 7% and Japan ended 5.7% lower. Trading in India was halted for an hour after shares sank 10% as markets opened. In Europe, markets began sharply lower, but recovered somewhat, with London briefly pushing into positive territory.

In currencies, the dollar gained against the euro and the pound, rising to $1.4386 versus the euro and $1.9353 to the pound, but it weakened slightly against the yen, trading at 106.76 yen.